Amazon Customer Obsession: Stories from the Trenches

One key Amazon Core Value is Customer Obsession. What exactly does that mean? In today’s business jargon, it seems almost trite to say the phrase, but at Amazon it’s not an empty term. Not at all.

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Below are a few examples from my time at Amazon. I hope they paint a picture for you of what Customer Obsession looks like in practice.

Amazon Customer Obsession and Core Values

Amazon.com employees have ingrained in them the amazon core values:

customer obsession

ownership

bias for action

frugality

high hiring bar

innovation

Customer Obsession is, arguably, the keystone value for the entire company: start with the customer, and work backwards. for most companies, a mission statement is a cheesy activity, popularized by Steven Covey. At Amazon, there’s no cheesiness about it: the employees believe it and live it.

Not All Cows are Holy But The Customer Always Is

I was in a meeting and Jeff Bezos and Jeff Wilke were present. During this meeting, several of us were arguing over technology and process for the fulfillment side of amazon. during this debate, Jeff Wilke raised his voice and reminded all of us that

“remember guys, nothing is holy but the customer. we can argue and debate and you can disagree with me or Jeff [Bezos], but it boils down to what’s right for the customer.”

This was a timely reminder and solidified my belief that the top brass at Amazon really believed and lived the core values.

Amazon Goes Christmas Shopping at Target

Pushing 300,000 – 600,000 units of product per day through a fulfillment center is no easy task. Gratefully, Amazon’s home-grown software and efficient processes help to deal with the immense volume. Sometimes, if there are inventory glitches or poor product flow, an activity known in warehousing as “product chasing” occurs.

What is Product Chasing?

“Chasing” is when a product is ordered, but it is nowhere to be found in the (1 Million FT^2) facility. In reality, it is somewhere, but according to the inventory software the product is supposed to be in its assigned bin, but it has been moved somehow, drifted to another bin, or stolen.

This defect is called Inventory Record Defect Rate (IRDR) and is one of the most important metrics at Amazon, and is highly scrutinized and reviewed by Bezos and his senior team.

Why is it important?

Because when the front-end Amazon store allows you to order something, the precondition is that the product and the quantity desired is currently in an Amazon facility: the software follows a very complicated algorithm based on network optimization, shortest path techniques, and traveling salesman routing; a check is made against the inventory database — in real time — how many are available, which facility, and how many have been committed already. when the order drops into the assigned facility, the picker goes to the bin where the product is supposed to be, but because IRDR is poor, the item is not there. this situation leads to two following options:

go to a local store and buy the item and ship it to the customer or

do a “network flip”, where the assigned facility “flips” the order to another facility that has that product.

Option (2) is ideal, but during the holiday season, it is very difficult to do. during the holidays, option (1) is common.

Doing option (1) is heroic and is a true example of customer obsession at work: it’s not about serving all customers as an aggregate, but it’s about serving one really well, several million times. at amazon, they really believe this and live this.

How do I know this?

Actually on day during Q4 Peak Season, I was a Christmas shopper. I went to Target and Toys ‘R’ Us to buy product that we had promised a customer but we didn’t have in stock.

Test and Test Again

usability and ease-of-use are prime at amazon. amazon runs usability test frequently, making sure that each store on the site and the flow is optimal, memorable, and meets user’s expectations. this is also true for internal software and process engineering work at amazon. the same core value of customer obsession runs it’s thread through all work — external and internal.

Summary

Customer Obsession is much more than customer satisfaction or customer happiness. the philosophy is about doing what is right for the customer first, then working backwards. moreover, a firm belief in customer obsession focuses the enterprise on being customer-focused and less competitor-focused. there are way too many companies that follow the close-follower mentality or are too competitor-focused. that approach blinds the enterprise and causes them to forget the true needs of the customer.

About Shmula

First, let’s talk about why this website is useful for you. Like you, I’m battling to become better and trying to put a small dent in my corner of the universe. I write about the struggle that we all face to become better leaders, better workers, and better people. I write about Lean and Six Sigma principles, and how we can put them into practice at our companies, in our businesses, and how to improve the customer experience. Get started by learning about Lean >